Great Trades

Great stock trades based on fundamentals and technical analysis.

Tuesday, June 05, 2007

CalPERS Invests in Metalline Mining

The California Public Employees Retirement System, the biggest U.S. pension fund, “made its first foray into commodities in March through the Goldman Sachs Commodity Index,” according to CalPERS information officer Clark McKinley. CalPERS also made its first purchase of Metalline Mining (MMG) by March 31, during the first full quarter that MMG was off the bulletin board and listed on the Amex, according to the listing of MMG’s top institutional holders: http://finance.yahoo.com/q/mh?s=MMG

“Strength in commodity markets will be something we should see generally over the next 10 to 20 years,'' said Russell Read, the chief investment officer, in an April 24 interview. “We see a relative shortage of commodities stemming from a boom in demand from emerging markets, particularly India and China.''

Looking at the MMG chart, there's been consistent positive money flow into the stock (green CMF indicator at the bottom of the chart) since late March, after the profit taking from the previous year's financing had pushed the stock down:

Despite recent weakness in the mining sector, MMG has held up very well and formed a bullish flag pattern over the last few weeks. There's been strong accumulation of the stock, as it breaks out from the triangle pattern in the longer term chart we highlighted last month.

Putting 2 and 2 together, it looks like CalPERS, which manages an enormous amount of money and has been increasing their commodity investments, has been accumulating MMG shares.

It's nice to see that, after being an under-the-radar bulletin board stock a few months ago, MMG is starting to get attention from the big boys. After our site visit last month confirmed that Metalline Mining is the Real Deal, we believe the CalPERS buying marks only the beginning of MMG's move to the major leagues.

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